Factors affecting post-service wage growth for veterans

84 Pages·1.1 MB·en_US

by  Nuckols, Donald Bert.;Mehay, Stephen L.;Gorman, Linda G.

DUOLEYKNOXLIBRARY
NAVALPOSTGRADUATESCHOOL
MONTEREY CA 93943-5101

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FACTORS AFFECTING POST-SERVICE WAGE GROWTH FOR
VETERANS
by
Donald B. Nuckols Jr.
Lieutenant, United States Navy
B.S., University ofMinnesota, 1986
Submitted in partial fulfillment
ofthe requirements for the degree of
MASTER OF SCIENCE IN MANAGEMENT
from the
NAVAL POSTGRADUATE SCHOOL
— December 1991
/
-
David R. Whipple, Chairm
DepartmentofAdministrative
11
Unclassified
SECURITYCLASSIFICATIONOFTHIS PAGE
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4 PERFORMINGORGANIZATIONREPORTNUMBER(S) 5-MONITORINGORGANIZATION REPORTNUMBER(S)
6a NAME OF PERFORMINGORGANIZATION 6b OFFICESYMBOL 7a NAME OFMONITORINGORGANIZATION
NavalPostgraduateSchool (Ifapplicable) NavalPostgraduateSchool
036
6c ADDRESS{City, State, andZIPCode) 7b ADDRESS(City, State, andZIPCode)
Monterey,CA 93943-5000 Monterey,CA 93943-5000
8a NAMEOFFUNDING/SPONSORING 8b OFFICESYMBOL 9 PROCUREMENTINSTRUMENTIDENTIFICATION NUMBER
ORGANIZATION (Ifapplicable)
8c ADDRESS(City, State,andZIPCode) 10 SOURCEOF FUNDING NUMBERS
ProgramtlementNc ProtectNc WorkUnitAccession
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1 1 TITLE(IncludeSecurityClassification)
FACTORSAFFECTINGPOST-SERVICEWAGEGROWTHFORVETERANS(UNCLASSIFIED)
12 PERSONALAUTHOR(S) Donald BertNuckolsJr.
13a TYPE OF REPORT 13b TIMECOVERED 14 DATEOF REPORT(year,month,day) 15 PAGECOUNT
Master'sThesis From To December 1991 74
16 SUPPLEMENTARY NOTATION
Theviewsexpressed inthisthesisarethoseoftheauthoranddonot reflecttheofficialpolicyorpositionoftheDepartmentofDefenseortheU.S.
Government.
17 COSATICODES 18 SUBJECTTERMS(continueonreverseifnecessaryandidentifybyblocknumber)
FIELD GROUP SUBGROUP NationalLongitudinalSurveyofYouth(NLSY),veterans,localunemployment
19 ABSTRACT(continueonreverseifnecessaryandidentifybyblocknumber)
Thisthesisanalyzesfactorsaffectingthepost-serviceearningsandwagegrowthofveterans. The 1979 1987 NationalLongitudinalSurveyof
Youthwasthesourceforthedata. Log-earningsregressionmodelswereestimatedforthe 1982and 1985surveys. Veteranstatu*wasfoundto
haveanegativeeffectonearningsin 1982,buthadnoeffectonearningsin 1985. Themostimportantsinglefactoraffectingearningsinthesetwo
yearswasthelocalunemploymentrate. Itwasalsodiscoveredthatthedeterminantsofearningsin 1982differedsignificantly betweencivilians
andveterans. Earningsgrowthequationswereestimatedfortheperiod 1982until 1985. Veteranstatuswasfoundtohavealargepositiveeffect
onwagegrowth. Thiseffectdisappearsafterapproximatelyfiveyears.
20 DISTRIBUTION/AVAILABILITYOFABSTRACT 21.ABSTRACTSECURITYCLASSIFICATION
UNClASSIflED/UNllMITED ] SAMtASREPOK1 J UtlCUSERS Unclassified
?2a NAME OF RESPONSIBLE INDIVIDUAL 22b TELEPHONE (IncludeAreacode) 22c OFFICE SYMBOL
StephenL. Mehay [phone] AS/MP
DD FORM 1473,84 MAR 83APReditionmaybeuseduntilexhausted SECURITYCLASSIFICATIONOF THIS PAGE
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POSTGRADUATE SCHOOL
SfAVAL
Monterey, California
THESIS
FACTORS AFFECTING POST-SERVICE WAGE GROWTH FOR
VETERANS
by
Donald Bert NuckolsJr.
December 1991
Thesis Advisor: Stephen L. Mehay
Co-Advisor: Linda Gorman
Approved for public release; distribution is unlimited

.
ABSTRACT
This thesis analyzes factors affecting the post-service
earnings and wage growth of veterans. The 1979-1987 National
Longitudinal Survey of Youth was the source for the data.
Log- earnings regression models were estimated for the 1982 and
1985 surveys. Veteran status was found to have a negative
effect on earnings in 1982, but had no effect on earnings in
1985. The most important single factor affecting earnings in
these two years was the local unemployment rate. It was also
discovered that the determinants of earnings in 1982 differed
significantly between civilians and veterans. Earnings growth
equations were estimated for the period 1982 until 1985.
Veteran status was found to have a large positive effect on
wage growth. This effect disappears after approximately five
years
in
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TABLE OF CONTENTS
I. INTRODUCTION 1
A. Thesis Objectives 1
B. Background 4
1 Human Capital 5
2 Unemployment 6
C. Organization of the Study 7
II. LITERATURE REVIEW 8
A. Background Literature 8
1. Stolzenberg and Winkler [Ref. 6] 8
....
B. Review of Post-Service Earnings Studies 11
1. Cooper [Ref. 3] 11
2. Bryant and Wilhite [Ref. 5] 14
3. Borjas and Welch [Ref. 7] 18
4. Hirschkowitz [Ref. 8] 20
C. Summary 23
III. DATA AND METHODOLOGY 24
A. Data 24
...
1. Sample Selection for Earnings Analysis 25
a. Data Analysis 26
2. Sample Selection for Wage Growth Analysis 37
.
IV